The extended service now assists receiving banks in identifying ‘money mule’ accounts involved in fraudulent transactions.
Mastercard has broadened the scope of its AI-driven fraud detection system, now assisting receiving banks in identifying and halting fraudulent transactions as they happen. The initiative, which launched in early 2023, has already helped UK banks prevent unauthorised payments from leaving victims’ accounts by analysing various data points in real time to assess the risk of a transaction.
Known as authorised push payment (APP) fraud, these scams occur when individuals are tricked into transferring money to fraudsters, believing they are making legitimate payments. The scammers often use deceptive tactics such as fake websites, emails, or phone calls to create a false sense of security for the victims.
The new extension of the service includes monitoring payments that are received by banks, aiming to identify when the funds may be directed towards “money mule” accounts. These accounts are used by criminals to move the stolen money and often involve individuals who unknowingly or knowingly allow their accounts to be used in exchange for a cut of the cash.
Initial trials of this expanded “inbound risk” feature have shown positive results, with Mastercard reporting that it has helped banks detect high-risk mule accounts much earlier in the payment process.
Johan Gerber, Executive Vice-President for Security Solutions at Mastercard, emphasised that these additional safeguards offer banks “extra lines of defence,” helping them to prevent scams before they escalate.
In addition to this real-time fraud detection system, Mastercard highlighted the importance of reimbursement protocols for scam victims. A voluntary reimbursement code has been in place, allowing banks to refund customers tricked into making payments to fraudsters. However, from October 7, a mandatory reimbursement code will be enforced by the Payment Systems Regulator (PSR), ensuring that victims of bank transfer scams are compensated unless gross negligence is involved.
